The Dictionary of Financial Terms for Crypto Currency

The Central Bank of the Republic of Turkey (CBRT) aims to provide financial literacy to the masses outside the financial sector, within the scope of Economy for All.

A

Open Market Operations (OMO): It is the transaction of buying and selling treasury papers with the aim of increasing or decreasing the money supply within the framework of the monetary policy implementation of the central banks. Interbank Money Market transactions are also within the scope of “Open Market Operations”. Such transactions are carried out by the Open Market Operations and Money Market Directorates within the Central Bank of the Republic of Turkey.

Buy-Sell Difference: It refers to the difference between the buying and selling prices of any traded security. It is the value of the difference between the buying and selling prices of the currency pair in pips.

Bid: The price at which market participants are willing to buy the assets traded in the market.

Principal: It is the raw form of the money that is operated without interest.

Arbitrage: It is the process of making a profit by simultaneously buying any security, currency or commodity from one market and selling it in another market (by exchanging the securities). Arbitrage transactions lead to a reduction in price differences between markets. Today, with the increase in communication technology and the decrease in the cost of accessing information, the price difference between the markets is extremely low, and the differences that arise instantly disappear with such transactions.

Bear Market: It refers to the markets where the prices show a downward trend.

Ascending Trend Channel: The ascending trend channel connects the bottom points of the upside markets and moves parallel to a trend line. The ascending trend channel and the trend line form the lower and upper limits of an uptrend. It is used in bull market.

B

Interbank Card Center (BKM): It is a payment system with legal personality, which was established in 1990 with the partnership of 13 public and private Turkish banks to provide clearing and settlement of debit cards and credit cards. Through BKM, banks provide clearing and reconciliation of credit and debit card payments made on behalf of each other.

Interbank Money Market: It is the market operating under the CBRT, where banks can carry out TL deposit buying and selling transactions with each other and with the CBRT, as well as late liquidity window and intraday limit transactions only by the CBRT.

Banknote: Non-interest bearing securities on which the payment of the amount written on it is guaranteed by the issuing institution. It is a legal payment instrument. The CBRT is the only institution authorized to issue Turkish lira banknotes.

Initial Margin: The initial amount taken as collateral in order to open a position in the transactions to be made by the customer.

Base Effect: When calculating the change between two periods, if there is a significantly lower or higher realization than normal in the period referenced to the change, it expresses the effect reflected in the period in which the change is calculated.

Base Point: It is a unit of measurement that expresses the change in interest rates. It corresponds to the fourth digit after the comma (0.0001). For example, if the interest rate rises from 5.25% to 6.75%, there is an increase of 150 basis points. In other words, a change of 100 basis points corresponds to a change of 1%.

Base Currency: It is the expression used for the first currency to be bought and sold in currency pairs.

Balance Sheet: It is the table that shows the assets owned by a business and from which sources they are financed.

Bull Market: It refers to the time periods when the exit trend is dominant in the markets in general.

Budget: It is the table that contains the mutual list of income and expenses that are expected to occur in a certain future period.

Budget Deficit: It is the situation where expenditures are more than revenues in the public balance of a country.

C-C

Current Account Deficit: A country's income from goods and services exported is less than the country's payments for goods and services imported from abroad.

Current Rate: It means the rate used in the buying and selling of the foreign currency exchanged on the same day in the foreign exchange markets.

Cross Rate: An exchange rate defined as the parity between two foreign currencies and each of these two currencies with a third foreign currency (usually the US dollar).

Turnover: It is the total value of the transactions that took place within a certain period of time.

D

Floating Exchange Rate Regime: It refers to the system in which the exchange rate is determined largely according to the supply and demand conditions in the market. In order to prevent excessive volatility in exchange rates and/or movements that are disconnected from market fundamentals, central banks intervene in the market infrequently and in limited amounts by buying/selling foreign exchange.

Deflation: It expresses a continuous decrease in the general level of prices. It is the constant cheapening of goods and services, but at the same time, the demand for purchases of these goods and services also decreases.

Deflator: It refers to the price index used in converting the value of an economic size expressed in monetary terms (nominal) to the real value (real).

Devaluation: It refers to the decrease in the value of the national currency against foreign currencies in the fixed exchange rate regime.

Government Domestic Debt Securities: T.C. They are debt securities issued in the domestic market by the Ministry of Treasury and Finance.

Government Bonds: These are debt securities issued by the Ministry of Finance with equal nominal values ​​and the same wording.

Disinflation: It means a decrease in the rate of price increase. It refers to the falling inflation process experienced during the transition from high inflation to low inflation.

Resistance Level: It is the price level where prices have difficulty in rising and selling transactions can occur.

Foreign Trade Balance: It expresses the difference between the amount of export and import of goods realized and passed through customs between residents and non-residents. If exports are more than imports, there is a foreign trade surplus, and in the opposite case, a foreign trade deficit occurs.

Terms of Trade: It is the ratio of the export unit value index to the import unit value index. The fact that the terms of trade is above 100 indicates that the export prices of tradable goods are higher than the import prices. Unit value indices are calculated by TURKSTAT.

Dollarization: The residents of a country use foreign currency instead of their own national currency as a medium of exchange, unit of account, and store of value. Full dollarization is when a country completely abandons its national currency and adopts a foreign currency as its official currency. Partial dollarization; It occurs when economic units in a country start to choose foreign currency financial assets instead of national currency financial assets in order to protect against possible depreciation of the national currency in an environment of high inflation and uncertainty.

Currency in Circulation: It is the amount obtained by subtracting the amounts of banknotes and coins in bank vaults from the sum of banknotes and coins in circulation.

Exchange Rate: An expression of one national currency in terms of another national currency.

World Bank: It is an international organization established after 1944 under the name of "International Bank for Reconstruction and Development (IBRD)" for the reconstruction of Europe. It mostly provides long-term project loans to developing countries.

TO

Effective: It is a term used to express the money that has not been transformed into dematerialized form and that economic units actually hold as paper money (banknotes) and coins.

Economic Confidence Index: It is an index that summarizes the evaluations, expectations and trends of consumers and producers regarding the general economic situation, and consists of a combination of consumer confidence indicator and seasonally adjusted confidence indicators for the manufacturing industry (real sector), services, retail trade and construction sectors by weighting.

Electric Fund Transfer System (EFT): It is a payment system that provides real-time settlement of payment transactions made in Turkish lira in electronic environment. The owner and operator of the EFT system is the CBRT. The EFT System has two components, the Inter-Customer TL Transfer System and the Interbank TL Transfer System. The EFT System works between 08.00-17.30 on weekdays except for public holidays, and the system closes at 13.00 on half working days.

Electronic Money: An electronic money issuer issued against funds accepted by the electronic money issuer, stored electronically, used to perform payment transactions defined in the Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions No. 6493. It is a monetary value accepted as a means of payment by real and legal persons outside the organization.

Emission: To circulate is to export.

Inflation: It is the continuous upward trend in the general level of prices. Inflation is measured by official indices published by TURKSTAT that show consumer and producer price developments.

Euro Dollar: It is used to express deposits in US dollars held in banks outside the United States (USA) or in foreign branches of US banks. The Euro expression derives from the fact that the vast majority of such deposits are held in banks, particularly in Western European countries. US dollar accounts held in Asia and all other similar countries are also called by this name.

F

Interest Rate: It is the return on capital from the factors of production. In other words, it is the cost of using money.

Financial Stability: It refers to the stability and resistance to shocks in financial markets, institutions operating in these markets and payment systems. Stability in these areas generally brings about the healthy and stable functioning of the financial system, thus the productive allocation of resources in the economy and the appropriate management and distribution of risks. It is a well-known fact that financial instability will create significant problems in the economy, and the high cost of financial crises indicates the importance of financial stability.

Price Margin / Price Range: The lowest and highest prices that can be suggested for a stock during the session form the Price Margin / Price Range of that stock. The price margin is calculated automatically by the System for each session as 10% above and below the base price. The upper bound is determined by rounding to the appropriate upper price tick, and the lower bound by rounding to the lower price tick.

Financial Literacy: It is the ability of an individual to have basic financial knowledge that enables him to make effective and informed decisions in the process of managing his personal budget and to increase individual and social financial well-being by implementing these decisions.

Price Stability: It refers to a low and stable inflation rate that will not be effective in the decision-making processes of economic units for the long-term main objectives of monetary policy (growth and employment).

Fund: Refers to banknotes, coins, fiat money or electronic money.

Forward Transactions: It means forward-dated transactions. It envisages the delivery of a certain asset at a predetermined price at a predetermined date. Transactions are generally not carried out in organized markets, but in line with the needs of the parties, with the buyer and seller facing each other.

G

Gross National Product (GNP): It is the added value produced by the citizens of a country in a period.

Gross Domestic Product (GDP): It is the added value produced within the borders of a country in a period.

Late Liquidity Window: In order to prevent problems that may arise in payment systems, the CBRT, as the ultimate credit authority, provides banks with an unlimited overnight TL borrowing facility in return for their temporary liquidity needs at the end of the day, and overnight TL debt under the same conditions so that they can utilize their liquidity surpluses. the opportunity to give.

H

Public Offering: Intermediary institutions can mediate in the public offering of stocks in two ways; these are underwriting and best effort methods.

Ready Facilities: Refers to the short-term Turkish lira borrowing and lending opportunities provided by the CBRT to banks and intermediary institutions at policy interest rates, in order to regulate the money supply and the liquidity of the economy effectively, within the framework of monetary policy targets.

Treasury Bill: T.C. These are debt securities with a maturity of less than one year issued by the Ministry of Treasury and Finance.

Stock: It is to provide unfair benefit or eliminate a loss in a way that disrupts the equality of opportunity among those who trade in the capital market by using information that has not yet been disclosed to the public, which may affect the value of capital market instruments, for the purpose of gaining benefits for itself or third parties.

I-I

IBAN (International Bank Account Number): It is an international bank account number created according to a certain standard in order to make money transfers fast, error-free and at low cost.

Export: It is the sale of goods by persons and institutions residing in a country to other countries.

Labor Force: Those who are included in the labor market from the working age population by showing the desire to work are accepted in the labor force. The sum of those who are looking for a job but cannot find a job, in other words, those who are unemployed and those who work, constitutes the workforce.

Unemployment Rate: It is defined as the ratio of the unemployed to the labor force.

Import: People and institutions residing in a country buy goods from other countries.

K

Leverage Ratio: It is the ratio of debt to equity or total capital. Leverage ratios show the resource structure of the business and enable it to be seen with which resources and how much the assets of the business are financed. The leverage ratio developed under Basel III is calculated by dividing the Tier 1 capital by the total risk amount.

Consolidation: It refers to the compulsory or voluntary restructuring of a debt in terms of maturity, interest, type and similar aspects, rather than being paid by the debtor.

Convertibility: It is the ability of a country's currency to be freely exchanged for another country's currency in foreign exchange markets and used as a medium of exchange in international commercial transactions.

Credit Risk: It is the risk that a financial institution will not be able to fully meet its obligations on time or in the future.

Currency Risk: It refers to the possibility of loss from changes in assets and/or liabilities as a result of fluctuations in the value of the exchange rate in the future. There are methods such as investors taking positions in both financial and commodity markets, investing in the financial markets of more than one country and using derivative products or markets to hedge currency risk.

L

Liquidity: It is the criterion of being able to buy and sell any asset or security traded in the market without affecting the market price. It is expected that the transaction volumes of assets or assets with high liquidity will also be high.

Liquidity Risk: Refers to funding and market liquidity risk. Funding risk refers to the risk of the need for additional funding due to the inconsistency between short-term cash inflows and outflows, while market liquidity risk refers to the risk that includes the time and value of financial assets.

M

Fiscal Policy: Governments shape the way they collect income, spend and borrow in order to achieve certain goals such as employment, growth and inflation.

Securities: Conceptually, it means that central banks can freely use the monetary policy tools they foresee in their decisions, without being affected by external factors (mostly political).

Central Bank Intervention: It is the buying and selling of the central banks in the markets in order to realize their short and long term monetary policy objectives. With the intervention, it is aimed to reduce/raise the market prices of the variables such as foreign currency and interest rates, to the levels in the policy projections. Intervention methods may differ. Central banks can intervene directly and openly by showing themselves as a party, or they can intervene indirectly.

Settlement: It is the fulfillment of obligations arising from the transfer of funds or securities between two or more parties.

N

Nominal Value: It is the value written on a value.

O-O

Options: These are contracts that give the right to buy and sell a certain good, security or financial indicator at a certain maturity and price in advance.

Organized Derivatives Markets: These are the markets operating within the body of the stock exchange, where standardized derivative contracts are bought and sold on futures, and the exchanges are guaranteed by an institution.

Volatility: It is the expression of the volatility in the price of a security. It is mostly measured with standard deviation. High volatility is indicative of increased uncertainty.

Payment System: It is a structure with common rules and providing the necessary infrastructure for clearing and settlement transactions in order to ensure the realization of fund transfers arising from transfer orders between three or more participants.

Balance of Payments: It is a statistical report prepared to obtain systematic records of economic transactions between residents of an economy (general government, central bank, banks, other sectors) and residents of other economies (residents abroad) in a certain period.

P

Money Market: It is the market where short-term (90 days or less for international markets), highly liquid financial instruments are traded.

Monetary Policy: It refers to the decisions taken to affect the availability and cost of money in order to achieve goals such as economic growth, employment increase and price stability. The institutions responsible for its implementation are central banks. In the CBRT Law, it is stated that the main purpose of the CBRT is to ensure price stability.

Monetary Policy Committee (MPK): The exchange rate regime to determine the monetary policy principles and strategies in order to ensure price stability and the inflation target within the framework of these strategies, to take the necessary measures to protect the domestic and foreign value of the Turkish lira, and to determine its equivalence against foreign currencies and gold, It is also a board established within the CBRT, in charge and authorized to be determined together with the government.

Rate of Circulation of Money: It shows how many units of goods or services a unit of money allows to change hands. It is expressed in GNP / Money Stock.

Monetary Quantities: Monetary aggregates are calculated by deducting the liabilities of the monetary sector to each other from the sum of the money in circulation and the various liabilities of the monetary sector (central bank, banks and money market funds), which are monetary or convertible into money. There are various definitions of monetary size according to the degree of liquidity of the assets it contains:

M1: Consists of money in circulation and demand deposits.

M2: It consists of the sum of M1 and time deposits.

M3: M3, which is the broadest money supply, consists of M2, funds obtained from repo and money market funds and securities issued (with maturity up to 2 years).

Parity: It is the value of the other country's currency calculated against the currency of this country based on the currency of one country.

Market Interest Rate: The interest rate paid on deposits and other investments in the money market, determined by the interaction of money supply and money demand.

R

Real Effective Exchange Rate: It refers to the adjustment of the nominal effective exchange rate between countries with a relative price or cost criterion (such as Producer Price Index-PPI, Consumer Price Index-CPI, Unit Labor Cost-BİM, Gross Domestic Product-GDP deflator). .

Real Interest Rate: It is the nominal interest adjusted for inflation. Technically, it is found by subtracting the expected inflation rate from the nominal interest rate.

Real Exports: Expressed by the export quantity index. The export quantity index measures the change in the export quantity provided that the prices are fixed. Export quantity indices are calculated by TURKSTAT.

Real Imports: Expressed by the import quantity index. The import quantity index measures the change in the import quantity, provided that the prices are constant. Import quantity indices are calculated by TURKSTAT.

Rediscount: In other words, it means that the assets that have been changed hands for a price (discount) are exchanged for a price (rediscount).

Repo: It is generally used to temporarily increase the liquidity of the banking system when the liquidity shortage in the market is temporary. The central bank purchases securities from institutions authorized to carry out open market operations (at the price determined at the time of the transaction) with a commitment to sell them back at a later date. The resale price is determined on the date the purchase is made. The party to the transaction undertakes to purchase the security subject to the repo transaction at the maturity date. In terms of the Central Bank, repo transaction means providing temporary liquidity to the market in exchange for securities subject to repo during the transaction maturity within the framework of open market operations.

Revulation: It refers to the increase in the value of the national currency against foreign currencies. For example, an increase in the value of the Turkish lira against the US dollar from 1.3 TL to 1.2 TL (depreciation of the US dollar) means that the TL appreciated by 0.1 TL.

Reserve Money: It refers to foreign currency and gold denominated assets in the portfolios of central banks and international financial institutions. Accordingly, in order for a payment instrument to be a reserve currency, its value should be stable against other currencies, it should belong to a country with a large share in world trade, and it should be easily bought and sold in foreign exchange markets.

Q-S

Fixed Exchange Rate Regime: A system in which a national currency is fixed at the value of a foreign currency or a basket of currencies and the maintenance of this value is sometimes explicitly and sometimes implicitly guaranteed by the monetary authority. Since the value of the national currency is predetermined, it does not reflect the current supply and demand conditions.

Industrial Production Index: It is an index calculated monthly in order to measure the positive or negative effects of the developments in the economy and the economic policies implemented in the short term.

Purchasing Power Parity: It is the exchange rate that equalizes the prices of similar tradable goods and services in different countries. Since only tradable goods and services are taken into account when calculating purchasing power parity, such a calculation may be insufficient to measure the real value of the exchange rate between the two countries' currencies.

Free Floating Exchange Rate Regime: It expresses the system in which the exchange rate is determined according to the supply and demand conditions in the market. Central banks do not intervene in the market at all, or only very rarely, in unusual circumstances.

Capital Market: These are the markets where investment instruments with maturities longer than one year are issued and traded.

Spot Market: It is the market where the purchase or sale of a product is carried out at the price determined on the transaction date, at most two business days after.

Stagflation: It refers to the situation that occurs when inflation rises in an environment where production decreases or at least does not increase in an economy.

Sterilization: Open market operations by central banks to offset the effects of money supply increases that occur for various reasons.

Transparency: For central banks, transparency is the provision of information that will enable the public to understand the monetary policy strategy, objectives and practices.

T

Bonds: Securities with a maturity of more than one year.

Swap: A transaction in which two parties exchange the cash flow associated with an asset or liability.

Saving: The portion of income that is not spent on consumption as a result of postponing consumption to a future date. The desire to earn more in the future or the instinct to take precautions against unexpected situations that may arise in the future are the reasons that increase the tendency of individuals to save.

Technical Analysis: It is making price predictions for the future by analyzing past market movements based on indicators such as price and volume. For this purpose, various graphic formations and statistical methods are used. It is based on the assumption that the formations that appear on the charts due to the past price movements constitute indicators for the future, so such formations can be used as indicators for trading. This type of analysis shows, for example, that the lowest prices in the past, in other words, the points where prices start to rise are the "support point", so these points should be expected (the criterion) for buying, again the highest prices in the past are the "resistance" points and the selling point suggests that it should be taken into account.

Consumer Price Index (CPI): It is an index that measures the changes in the prices of goods and services purchased by the consumer. While calculating the CPI, firstly, the expenditures made by a sample group representing the whole country on goods and services in a year are compiled. According to this expenditure structure, the relative shares of goods and services in the index are determined. Here, goods and services that are highly consumed by the sample have a higher weight, while those that are less consumed have a lower weight. The prices of determined goods and services are collected from all provinces on certain days of each month. CPI is calculated with the collected prices and the weights determined at the beginning of the year.

Consumer Confidence Index (TGE): It is an indicator that summarizes the answers given to different questions of the Consumer Tendency Survey in order to monitor the developments in consumer confidence.

Derivative Transactions: Transactions where the maturity, amount and price of an asset (foreign currency, interest, goods) that will be delivered at a future date exceeding the spot (two business days) transaction date are determined and the contract is concluded. Forward, future, swap and options are examples of such transactions.

U-U

Tertiary Market: Transactions made in over-the-counter (OTC) markets are called tertiary market transactions.

V

Futures Contract: It means forward-dated transactions. It envisages the delivery of a certain asset at a predetermined price at a predetermined date. Transactions are generally not carried out in organized markets, but in line with the needs of the parties, with the buyer and seller meeting. Such contracts, which can be arranged over the instruments subject to purchase and sale such as foreign currency, securities, and goods, can be aimed at speculative purposes as well as eliminating price risk.

Futures Markets: Futures markets are markets where contracts that include a commitment to deliver a certain product at a future date, with the price fixed today, are traded.

Value Value: It is the date on which an agreed-upon transaction will actually be executed, for example, when mutual accounts will be credited and debited. Similarly, it refers to the date on which a fund can actually be used, for example, by the owner of the deposit.

Y

Investment Survey: It is a survey applied twice a year in order to obtain the evaluations of the workplaces operating in the industrial sector about the current investment trends and investment plans for the near future, the purpose of these investments and the factors that affect the investment decisions of the business managers.

Mutual Funds: The money collected from the public in return for participation certificates is converted into a portfolio consisting of capital market instruments, gold and other precious metals traded in national and international stock exchanges by investment companies.

Overseas Producer Price Index (YD-PPI): It is the index that measures the price changes in the consumption, intermediate and capital goods produced to be exported abroad, and in the energy sector.

Domestic Producer Price Index (D-PPI): It is the index that measures the price changes in the domestically produced consumption, intermediate and capital goods and the energy sector.

Z

Required Reserve Ratio: It is the legal ratio that shows the amount of reserves that banks and other financial institutions have to keep in the central bank against their deposit, loan and similar liabilities on their balance sheets. The required reserve ratio may differ depending on the type, maturity and currency of the liabilities. Central banks can use this ratio as a monetary policy tool. If banks do not have idle reserves, when the reserve requirement ratio is increased, banks will recall their loans, causing a decrease in the money supply. When the required reserve ratio is reduced, some of the required reserves turn into usable reserves, which increases the credit base of banks. The expansion of the bank's credit base also causes an increase in the money supply.

Share: